Safehold Inc

Good morning and welcome to Safehold's first quarter 2020 earnings conference call. If you need assistance during today's call, please press star zero. If you wish to ask a question later at the time of our question and answer session, please press one zero. As a reminder, today's conference is being recorded. At this time, for opening remarks and introductions, I would like to turn the conference over to Jason Fuchs. and the Senior Vice President of Investor Relations and Marketing. Please go ahead, sir.

Thank you, Tiffany. Good morning, everyone, and thank you for joining us today for Statefold Earnings Call. While we are all social distancing and working remotely, we sincerely hope you and your families are well during these challenging times, and we look forward to better days soon. On the call today, we have Jay Sugarman, Chairman and Chief Executive Officer, Marcus Alvarado, President and Chief Investment Officer, and Jeremy Foxkeen, our chief financial officer. This morning, we plan to walk through a presentation that details our first quarter 2020 results. The presentation can be found on our website at safeholdinc.com and by clicking on the investors link. There'll be a replay of this conference call beginning at 1 p.m. Eastern time today. The dial in for the replay is 866-207-1041. with the confirmation code of 7359470. Alternatively, the replay can also be found on our website. You'll also be able to see on our site our recently published 2019 annual report, our 2020 proxy statement, and our inaugural ESG report. Before I turn the call over to Jay, I'd like to remind everyone that statements in this earnings call which are not historical facts may be forward-looking. Our actual results may differ materially from these forward-looking statements and the risk factors that could cause these differences are detailed in our SEC reports. Safehold disclaims any intent or obligation to update these forward-looking statements except as expressly required by law. Now, with that, I'd like to turn the call over to Chairman and CEO, Jay Sugarman.

Jay? Thanks, Jason. I'll just start by expressing our sympathy to those that have experienced loss from COVID-19. and our gratitude to those on the front lines of this fight. Everyone who's working to mitigate the impact of this global crisis has our thanks and our support. Like most of you, we entered this year confident in our strategy and excited to continue building upon our successes in 2019. Our pipeline looks to be growing nicely and our teams are engaged with customers across the country. Even as the impact of the virus began to be clear, we work to be in a position to close deals if our customers wanted to close them. and raised additional capital during the quarter to ensure our ability to be there when our customers needed us. However, by the end of the quarter, it was clear most transactions were being halted or postponed until things become more settled. We closed a handful of small multifamily and office deals that were near the finish line when things started to unfold, but larger ground lease deals that were well along were put on hold by building owners and acquirers. We continue to be engaged in conversations with customers on a number of fronts and would expect our better priced, more efficient capital to be in demand once there's more clarity about the future. We expect deals put on hold may very well come back and that existing customers will find opportunities to deploy capital and seek our help in capitalizing those opportunities. As a result, we expect to be able to give a better sense of what new transaction volume might look like for the rest of the year by next quarter. As for the existing portfolio, all of our ground leases paid in April is expected. 100% payment is, of course, natural given a ground lease is placed in the capital structure. Though that did not stop a very small percentage, less than 2% of customers, from asking if any deferral of rent were possible. While we give these requests due consideration, we also try to share with customers that one of the reasons we can provide long-term, low-cost capital for them is the steady performance of our ground lease portfolio in circumstances like these. Turning to the value of our existing portfolio, we are witnessing historic low yields in bonds of similar quality and maturity. Recent trades in our competitive set comprised of the highest quality long maturity bonds have been in the low 3% area. And together with tips bonds trading at negative rates, suggest our portfolios mid 5% yield have become increasingly valuable. This is one reason we believe the value of our portfolio and our share price increased further during the quarter. Two other positives for the quarter I want to mention. First was the addition of our new CFO, Jeremy Fox Gein at the end of March. Jeremy comes to us from McKinsey, North America and has already proven a valuable member of our senior management team. Second, Brett Asnas was promoted to EVP, head of capital markets, where he continues to drive access to innovative capital to grow the business. Both moves mean we are well positioned to pursue future growth once the virus impact abates and transaction activity returns. And with that, let me turn it over to Jeremy.